Blocking the 'sports book on every corner'

Two companion bills now working their way through the Legislature — Assembly Bill 360 and Senate Bill 416 — seek to limit two Nevada business models: the free-standing sports betting kiosk and the slot machine parlor, of which the best-known local example is the Dotty’s chain.

Sponsors insist the bills are not retroactive — they’re not seeking to close any business currently in operation. What the Nevada Resort Association does seek to remedy, though, is the gradual evaporation of the line between restricted and unrestricted gaming licenses.

Unrestricted licenses are the kind held by major casinos. To get one, Nevadans decided long ago gamers must invest sizable sums in hotel rooms and other amenities. Result? The kind of tourist magnet known around the world as the “Las Vegas casino.” On the other hand, restricted gaming licenses allow taverns, convenience stores, even supermarkets to install up to 15 machines in order to share the benefits of legalized gaming without paying the revenue taxes levied on major casinos — but only in cases where the gaming revenue is “incidental to the primary business of the establishment.”

Why that restriction? To block a race to the bottom triggered by no-frills slot parlors not required to make the kinds of investments required of major casinos.

In Nevada, there are now nearly 100 such joints.

Regulatory rulings that allow properties with much smaller investments to act more and more like casinos — by accepting and paying off sports bets, for example — will dilute the willingness of investors to fund more big casinos and sports books, which will hurt the state in the long run, warned Corey Sanders, chairman of the NRA, in an April 2 letter to the Senate Judiciary Committee.

Allowing sports bettors to collect on bets at a non-casino location will eventually give Nevada a sports betting kiosk on every street corner, warned NRA President Virginia Valentine in a 2011 memo to association members. From there, restricted licensees “could soon argue that video versions of roulette, keno and many other games are appropriate for their locations. If a restricted location can offer almost every form of wagering that a resort casino can offer, it destroys the incentive to build additional resort casinos,” she warned.

Fancy casino sports books are an attraction to tourists who come to Nevada for major events. The Super Bowl and March Madness “fill our hotel rooms, restaurants and stores,” Ms. Valentine writes. “If sports books are down-scaled or closed because customary patrons no longer frequent them, the ability to attract tourists specifically for sporting events may be lost. This will cost the state a great deal more than anything that might be gained by having a betting shop on every corner.”

The current bills would restrict sports betting kiosks, and also stipulate that to receive a new restricted license for 15 machines, a tavern would have to offer a restaurant seating 25 patrons and serving hot food 12 hours per day, and would have to have its first eight machines embedded in an actual bar.

“If you’re going to claim to be a tavern, look like a damned tavern,” says an NRA spokesman.

As these bills merely clarify what was supposed to be state law in the first place — maintaining the Nevada casino model that currently funds 42 percent of the state’s general fund budget — they’re likely to pass, which is fine.

Yes, competition is good. It introduces innovations. But are we unhappy with the sparkling entertainment centers that make this city a prime tourist attraction — and which still compete with one another? Do we really want to see their jobs and profitability drained off by slot joints and betting kiosks wedged into fried chicken stands and abandoned shoe stores?